European Parliament threatens to lift Philippines' preferential trade status over rights abuses, a move that could tilt an already wobbly economy into crisis

Then presidential candidate Rodrigo Duterte raising a clenched fist during his campaign sortie in Lingayen, Pangasinan, north of Manila. Photo: AFP/Noel Celis

Europe and the Philippines’ diplomatic spat has rapidly escalated since President Rodrigo Duterte’s government briefly detained and unceremoniously expelled a senior European Union (EU) party official earlier this month.

The Party of European Socialists (PES), the second largest bloc in the European Parliament, strongly condemned the deportation of its deputy secretary general Giacomo Filibeck, a parliamentarian who had earlier led a fact-finding mission into Duterte’s lethal war on drugs.

The European Parliament has since passed a strongly-worded resolution that “condemn[ed] all extrajudicial killings and violence” and called for an immediate stop to “all extra judicial killings, enforced disappearances and any incitement to commit such killings” in Duterte’s drug war.

That diplomatic criticism could soon have grave economic impacts. The European Parliament has threatened to take “procedural steps” toward the “temporary withdrawal” of its preferential trading agreement with the Philippines over Duterte’s poor rights record.

Under the so-called Generalized Scheme of Preferences Plus (GSP+), the Philippines enjoys zero tariffs on almost all of its exports to Europe’s markets. Last year, Philippine exports to the EU hit US$10 billion, making the bloc one of its top export destinations.

The EU is also a leading source of investment and development aid to the country. The EU’s trade threat comes as the Philippine economy shows new signs of weakness, witnessed in a collapsing stock market, rising inflation and a worryingly high current account deficit.

Negotiations towards an EU-Philippine free trade agreement have also been effectively frozen due to pressure from European parliamentarians.

Much to the Philippine government’s chagrin, the European Parliament also called for the immediate release of one of Duterte’s chief critics, Senator Leila De Lima, who has been languishing in jail on questionable charges of abating drug trafficking.

European parliamentarians also criticized the Philippines’ abrupt decision to withdraw from the International Criminal Court (ICC) by calling on the Duterte administration to “cooperate fully with the Office of the Prosecutor of the International Criminal Court in its preliminary examination of the Philippines.”

Duterte withdrew his country’s membership earlier this year when the ICC signaled its willingness to open formal investigations against senior government officials for charges of crimes against humanity related to the drug war.

Party of European Socialists politician Giacomo Filibeck in a file photo. Photo: Flickr

The Duterte administration has maintained that the withdrawal was based on a perceived bias of the international body against the incumbent and done to protect the country’s sovereignty against external interference. It has also fired back at the EU on similar grounds.

“The European Parliament has crossed a red line when it called for unwarranted actions against the Philippines,” declared Philippine Foreign Secretary Alan Peter Cayetano. He accused the European Parliament of “interfere[ing] in the affairs of a sovereign state.”

“We, of course, find it unfortunate that members of the European Parliament once again interfered with the affairs of the Philippine state, rehashing issues and baseless claims that have been explained adequately by the Philippine government in several official statements,” presidential spokesperson Harry Roque said in a separate briefing.

Last year, the Philippine government threatened to reject all development aid from the EU amid disagreements over human rights concerns. Duterte, in turn, went so far as to threaten to expel all European ambassadors after a delegation of European parliamentarians visited the Philippines and criticized his drug war.

Subsequent efforts by EU officials to ease bilateral tensions, however, have been undermined by the latest round of tit-for-tat exchanges between the European Parliament and Philippine government.

Sensing an opportunity in light of the importance of the Philippines’ bilateral relations with the EU, independent and opposition senators have joined the chorus of criticism.

“This kind of reaction won’t help anyone,” lamented Senator Panfilo Lacson, who called for the government to seek dialogue with the EU and cautioned senior officials from “talking tough” and trying to “ape the President.”

Senator Antonio Trillanes, another staunch Duterte critic, warned the government’s defenders about possible prosecution for their relentless defense of the drug war amid growing international concern.

Denying reports of extrajudicial killings and human rights violations, he warned, could render them as enablers of crimes against humanity since “these deaths have been witnessed and documented by multiple credible sectors, individuals and organizations, both foreign and domestic.”

In January, the Philippine Senate ratified the Framework Agreement on Partnership and Cooperation Between the Philippines and the European Union (PCA). The aim of the agreement is to provide an institutionalized mechanism for both sides to address and manage areas of disagreement.

The PCA’s endorsement by the country’s top legislators underlined a strong domestic lobby for maintaining robust ties with Europe. As such, the Duterte administration is under pressure to maintain open communication channels with Brussels.

Foreign Secretary Cayetano said the Philippine government will “continue to engage the European Union in constructive dialogue on all issues” with the caveat that bilateral exchanges should be “based on the principles of sovereignty, non-interference, and mutual respect.”

The Philippines’ lurch towards autocracy under Duterte will exacerbate fissures in the country’s relations with traditional partners in the West, a key source of trade and investment in recent decades that the country now risks losing.